Perimeter Solutions, SA (PRM) Moves 8.5% Higher: Will This Strength Last?

Perimeter Solutions, SA (PRM) shares soared 8.5% in the last trading session to close at $15.27. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 13.5% gain over the past four weeks.

Perimeter Solutions has opened a new PHOS-CHEK facility at McClellan Park in Sacramento, CA, one of world’s most advanced fire-retardant production facilities. Spanning an area of 110,000-square site will serve as a major hub for production and distribution, enabling the company’s ability to deliver PHOS-CHEK to any airbase in North America within hours.  

The facility will produce three of the Perimeter Solutions’ most used fire retardants - PHOS-CHEK MVP-Fx, PHOS-CHEK 259-Fx and PHOS-CHEK LCE20-Fx. With this addition, Perimeter Solutions now has seven PHOS-CHEK production facilities, as well as seven distribution sites across the United States and Canada. 

This company is expected to post quarterly earnings of $0.28 per share in its upcoming report, which represents a year-over-year change of +100%. Revenues are expected to be $133.75 million, up 5.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Perimeter Solutions, SA, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on PRM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Perimeter Solutions, SA is a member of the Zacks Chemical - Specialty industry. One other stock in the same industry, CSW Industrials (CSW), finished the last trading session 0.2% lower at $289.31. CSW has returned -5.6% over the past month.

For CSW Industrials, the consensus EPS estimate for the upcoming report has changed -1.7% over the past month to $2.74. This represents a change of +10.9% from what the company reported a year ago. CSW Industrials currently has a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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